Economics · Macroeconomics (IS-LM Model)
In the IS-LM framework, fiscal policy is relatively more effective than monetary policy when:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both investment and money demand are interest-elastic
- 2Both investment and money demand are interest-inelastic
- 3Investment is interest-elastic and money demand is interest-inelastic
- 4Investment is interest-inelastic and money demand is interest-elastic✓
Correct answer
Investment is interest-inelastic and money demand is interest-elastic
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